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HomeMy WebLinkAboutCity Council Meeting 01/10/2012 Agenda Item 12- Dissolution of Redev. Agency & Election Re:Successor Agency CITY OF LAD LSINOF E DREAM EXTREME, le REPORT TO CITY COUNCIL TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: ROBERT A. BRADY CITY MANAGER DATE: JANUARY 10, 2012 SUBJECT: DISSOLUTION OF REDEVELOPMENT AGENCY AND ELECTION REGARDING SUCCESSOR AGENCY /SUCCESSOR HOUSING AGENCY Background On December 29, 2011, the California Supreme Court delivered its decision in the California Redevelopment Association v. Matosantos case, finding ABx1 26 (the "Dissolution Act ") largely constitutional and AB1x 27 (the "Alternative Redevelopment Program Act ") unconstitutional. The Court's bifurcated decision means that all California redevelopment agencies, including the Redevelopment Agency of the City of Lake Elsinore (the "Redevelopment Agency "), will be dissolved under the constitutional Dissolution Act, and none will have the opportunity to opt into continued existence under the unconstitutional Alternative Redevelopment Program Act. As a result, the Redevelopment Agency will be dissolved effective February 1, 2012. The Redevelopment Agency's non - housing funds and assets will then be turned over to a successor agency (the "Successor Agency ") charged with the responsibility of paying the former Redevelopment Agency's existing debts, disposing of the former Redevelopment Agency's properties and assets to help pay off debts and return revenues to the local government entities that receive property taxes (the "Taxing Entities "), and winding up the affairs of the former Redevelopment Agency. The Redevelopment Agency's affordable housing assets, other than its existing low and moderate income housing fund balance, will be turned over to a successor housing agency (the "Successor Housing Agency ") to continue performing affordable housing activities. The unencumbered balance of the former Redevelopment Agency's affordable housing fund balance will be remitted to the County Auditor - Controller for distribution to the Taxing Entities. AGENDA ITEM NO. 12 Page 1 of 7 SUCCESSOR AGENCY RESOLUTION JANUARY 10, 2012 Page 2 The Dissolution Act provides that the City of Lake Elsinore (the "City ") will be the "Successor Agency" to the former Redevelopment Agency unless the City elects not to serve as the Successor Agency, in which case the first other Taxing Entity making a proper election will be designated as the Successor Agency. If the City does not elect to be the Successor Agency, it must adopt a resolution to that effect and notify the County Auditor - Controller by not later than January 13, 2012. Though not explicitly required by the Dissolution Act, if the City elects to be the Successor Agency, Agency Counsel recommends that the City Council affirmative adopt a resolution declaring itself the "Successor Agency." The Dissolution Act also authorizes the City to elect to become the Successor Housing Agency of the former Redevelopment Agency and to retain the housing assets (other than any existing housing fund balance) and affordable housing functions of the former Redevelopment Agency. Discussion The Successor Agency and the Successor Housing Agency will play a key day -to -day role in assuring that the existing obligations of the former Redevelopment Agency are properly paid, and that the former Redevelopment Agency's properties and other assets are disposed of in an appropriate manner. While the Successor Agency will be overseen by an "Oversight Board" of representatives selected largely by the County and various local education districts, the staff of the Successor Agency will have a strong role in initiating and implementing actions in a way that achieves not only the requirements of the Dissolution Act but also is sensitive to the Tong -term development needs of the City and local community. If the City elects not to serve this role, the Successor Agency will be another Taxing Entity that may not necessarily take into account the interests of the City and local community in performing its functions. Similarly, if the City elects not to serve as the Successor Housing Agency, then another entity outside the City's control will perform various affordable housing functions in the City using the housing assets of the former Redevelopment Agency. The Dissolution Act provides that the liability of the Successor Agency is limited to the funds and assets it receives under the Dissolution Act to perform its functions. Thus, if it takes on the role of Successor Agency (and Successor Housing Agency), the City's liability for discharge the obligations of the former Redevelopment Agency would be generally limited to such amounts. Page 2 of 7 SUCCESSOR AGENCY RESOLUTION JANUARY 10, 2012 Page 3 Subject to the approval of the Oversight Board and to specified reductions if other funds are available for administration, the Dissolution Act permits the Successor Agency to receive an annual operating budget to defray its administrative costs in an amount up to five percent of the property tax allocated to the Successor Agency for FY 2011 -12 to pay the former Redevelopment Agency's existing debts, and up to three percent of the property tax allocated to the Successor Agency each succeeding fiscal year; provided, however, that the annual amount shall not be Tess than $250,000 for any fiscal year (or such lesser amount as agreed to by the Successor Agency). Fiscal Impact Cannot be determined at this time. Recommendation Approve the attached Resolution electing to serve as both the Successor Agency and Successor Housing Agency to the former Redevelopment Agency, and directing staff to file the appropriate notification of these elections in accordance with the Dissolution Act. Prepared by: Barbara Leibold City Attorney /Agency Counsel Approved by: Robert A. Brady City Manager ;� Attachment: 1. RESOLUTION OF THE CITY OF LAKE ELSINORE TO EXPRESS ITS INTENT TO SERVE AS THE SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE, PURSUANT TO HEALTH AND SAFETY CODE SECTION 34171(j) AND SECTION 34173, AND TO ELECT TO RETAIN THE HOUSING ASSETS AND FUNCTIONS PREVIOUSLY PERFORMED BY THE REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE, PURSUANT TO HEALTH AND SAFETY CODE SECTION 34176 Page 3 of 7 Page 4 of 7 RESOLUTION NO. 2012 -001 RESOLUTION OF THE CITY OF LAKE ELSINORE TO EXPRESS ITS INTENT TO SERVE AS THE SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE, PURSUANT TO HEALTH AND SAFETY CODE SECTION 34171(J) AND SECTION 34173, AND TO ELECT TO RETAIN THE HOUSING ASSETS AND FUNCTIONS PREVIOUSLY PERFORMED BY THE REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE, PURSUANT TO HEALTH AND SAFETY CODE SECTION 34176 WHEREAS, Assembly Bill 1X 26 (the "Dissolution Act ") and Assembly Bill 1X 27 (the "Alternative Redevelopment Program Act ") were enacted on June 28, 2011, to significantly modify the Community Redevelopment Law (Health & Safety Code §33000, et seq.; the "Redevelopment Law "); and WHEREAS, on August 11, 2011, the California Supreme Court agreed to review the California Redevelopment Association and League of California Cities' petition challenging the constitutionality of the Redevelopment Restructuring Acts; and WHEREAS, on December 29, 2011, the California Supreme Court ruled that the Dissolution Act is largely constitutional and the Alternative Redevelopment Program Act is unconstitutional; and WHEREAS, the Court's decision means that all California redevelopment agencies will dissolve on February 1, 2012 pursuant to the Dissolution Act; and WHEREAS, the Dissolution Act provides that the city that authorized the creation of the redevelopment agency shall be the "successor agency" to the dissolved redevelopment agency unless the city elects not to serve as the successor agency under Section 34173(d)(1) of the Redevelopment Law; and WHEREAS, Section 34176(a) of the Redevelopment Law provides that the city that authorized the creation of a redevelopment agency may elect to retain the housing assets and functions previously performed by the former redevelopment agency; and WHEREAS, the City of Lake Elsinore (the "City ") intends to, and shall serve as, the successor agency for the Redevelopment Agency of the City of Lake Elsinore (the "Agency ") in accordance with Section 34171(j) and Section 34173 of the Redevelopment Law; and WHEREAS, the City desires to elect to retain the housing assets and functions previously performed by the Agency in accordance with Section 34176 of the Redevelopment Law. Page 5 of 7 NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. The City hereby accepts the designation, and hereby declares its intent, to serve as the successor agency for the Agency in accordance with Section 34171(j) and Section 34173 of the Redevelopment Law. SECTION 2. The City hereby elects to retain the housing assets and functions previously performed by the Agency in accordance with Section 34176 of the Redevelopment Law. SECTION 3. The City Manager, or his designee, is hereby directed to file a copy of this resolution with the County Auditor - Controller. SECTION 4. The City Manager, or his designee, is hereby authorized to take such additional actions, and to execute all documents necessary and appropriate, for the City to transfer the assets of the Agency to the City, in its capacity as Successor Agency to the Agency, pursuant to Sections 34175 and 34176 of the Redevelopment Law. SECTION 5. This Resolution shall take effect from and after the date of its passage and adoption. PASSED, APPROVED AND ADOPTED this 10 day of January 2012. BRIAN TISDALE MAYOR ATTEST: VIRGINIA BLOOM CITY CLERK APPROVED AS TO FORM: BARBARA LEIBOLD CITY ATTORNEY CITY OF LAKE ELSINORE Page 6 of 7 STATE OF CALIFORNIA COUNTY OF RIVERSIDE CITY OF LAKE ELSINORE I, Virginia Bloom, City Clerk of the City of Lake Elsinore, California, hereby certify that Resolution No. was adopted by the City Council of the City of Lake Elsinore, California, at a regular meeting held on the 8 th day of November 2011, and that the same was adopted by the following vote: AYES: NOES: ABSENT: ABSTAIN: VIRGINIA BLOOM CITY CLERK Page 7 of 7